The Reserve Bank of India (RBI) has said that it will conduct the third auction of state developments loans (SDLs) worth Rs 10,000 crore under the Open Market Operations (OMO) on December 23, in a bid to inject liquidity in the system. The RBI will purchase the SDLs through a multi-security auction using the multiple price method.
The RBI is conducting OMO purchase of government securities to enhance liquidity support for financial markets so as to revive activity in stressed sectors which have been disrupted by the COVID-19 pandemic and successive lockdown. The RBI has already conducted two OMOs for SDLs covering all states and union territories for a cumulative amount of Rs 20,000 crore. The first batch of OMO was conducted in October and the second in November.
The RBI said it reserves the right to decide on the quantum of purchase of individual securities; accept bids for less than the aggregate amount; purchase marginally higher/lower than the aggregate amount due to rounding-off; accept or reject any or all the bids either wholly or partially without assigning any reasons.